The Securities and Exchange Commission (SEC) requires specific disclosures about executive compensation for public companies. The following Web pages contain information about SEC executive compensation regulations:

Executive Compensation

www.sec.gov/answers/execomp.htm or go to www.wiley.com/college/eldenburg

Federal regulations over disclosure of information about executive compensation (Regulation S-K, Subpart 229.400, Item 402):

ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr&sid=38d9c5cd67ee82979db06dfc66cca703&rgn

=div8&view=text&node=17:2.0.1.1.11.5.31.2&idno=17 or go to

www.wiley.com/college/eldenburg

REQUIRED

A. Discuss why the SEC requires special disclosures for executive compensation.

B. Conduct research to locate the annual CEO compensation report contained in a business publication such as Business Week or Forbes. Pick a company in the report, and answer the following questions:

1. What types of information does the report provide?

2. What rating was given for the CEO compensation of your company? How was the rating determined?

C. For the company you selected in part (B), conduct research to identify the company’s disclosures about executive compensation. Answer the following questions:

1. Discuss the ease with which you located the executive compensation information.

2. The SEC requires companies to provide a “clear, concise and understandable disclosure” for executive compensation. Discuss whether the information you found met this requirement.

3. Summarize the major types of pay received by the company’s CEO.

4. Does the company appear to use performance-based pay in compensating its top executives? Explain.

D. Describe uncertainties about whether the CEO pay for your company was reasonable.

E. Draw your own conclusion about whether the CEO pay for your company was reasonable. Explain.